An indirect benefit would be included in computing a non-resident’s income under s. 15(1) if the amount of the benefit were a payment made directly to the non-resident and if the non-resident taxpayer were resident in Canada. Would s. 246(1)(a) include such shareholder’s benefit in the non-resident’s taxable income earned in Canada, even though the benefit is akin to income from property rather than any of the Canadian income sources described in s. 2(3) (employment in Canada, carrying on business in Canada and dispositions of taxable Canadian property)?
CRA indicated that, generally, a non-resident’s Part I tax liability, including from any s. 246(1)(a) benefit, is based on the non-resident’s taxable income earned in Canada under s. 2(3) and Division D (ss. 115-116). To the extent that only s. 15(1) is relevant in the analysis of the s. 246(1)(a) benefit being conferred, such a benefit generally would not be considered taxable income earned in Canada, as it would generally not be included under s. 2(3) or Division D.
Even if the benefit amount were not taxable income earned in Canada, it could still be relevant for certain purposes in computing the non-resident’s income, as provided in s. 250.1(1)(b).